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Former Microsoft CEO Steve Ballmer at the 2021 groundbreaking for the Intuit Dome, the new home of the L.A. Clippers, the NBA franchise he acquired in 2014. (L.A. Clippers / Intuit Dome Photo)
[Editor’s Note: Microsoft@50 is a year-long GeekWire project exploring the tech giant’s past, present, and future, recognizing its 50th anniversary in 2025. Learn more and register here for our special Microsoft@50 event next Thursday, March 20, in Seattle.]
Bill Gates and Paul Allen brought Microsoft into the world. Gates and Steve Ballmer saw the company through adolescence. Ballmer was in charge for high school and college. Satya Nadella is taking Microsoft into adulthood.
That’s how Ballmer sees it these days.
“I look back, I have great pride,” he says, reflecting on his Microsoft years during an interview in an L.A. Clippers-themed conference room at the Ballmer Group’s Seattle-area headquarters. “I have great pride, and great joy, that the thing that we built has continued to flourish.”
What does he remember most about his more than 33 years there?
Ballmer grins and makes a clarification. He was at Microsoft for almost 34 years. Technically, it was 33 years and just under 8 months — from June 1980 to February 2014 — including 14 years as CEO.
“I usually roounnnddd up,” says the 68-year-old business leader, his voice rising with his trademark energy, the gleam in his eye indicating that he’s kidding, mostly. He’s always been a numbers guy, legendary for his ability to find the troubling little detail that the product team tried to hide deep in the deck. Precision counts, especially when you’re figuring out the future of multi-billion-dollar products.
Long before Elon Musk began trying to rein in federal spending, Ballmer founded a non-profit, non-partisan group, USAFacts, that tracks and reports on the government’s key financial numbers.
Behind the scenes, especially these days, Ballmer is not the caricature from YouTube, or the NBA owner cheering wildly for his team from the baseline. He speaks deliberately and thoughtfully about the things that matter to him. And clearly, Microsoft is still one.
RELATED EVENTMicrosoft@50: Brad Smith, Steve Ballmer, Nathan Myhrvold headline GeekWire’s March 20 event
“Hell, even my kids will say, it’s the closest thing I have to a child that’s not my kid,” he says.
For this installment in GeekWire’s Microsoft@50 series, Ballmer sat down to reflect on Microsoft’s history, and his own history at the company, in advance of the tech giant’s 50th anniversary. The interview also served as research for my upcoming on-stage conversation with Ballmer at GeekWire’s Microsoft@50 event in Seattle on Thursday, March 20.
He talked about milestones and missteps, reminisced fondly about many of the people he worked with, and shared his core Microsoft memories — from overseeing the formal incorporation of the company to making his final sales call as CEO. He dove eagerly into the historical Microsoft financial statements that I brought with me, going over the numbers to jog his memory about pivotal moments.
Microsoft’s largest shareholder
But this was not just an exercise in nostalgia. Ballmer is still the company’s largest individual shareholder. Microsoft still makes up roughly 80% of his portfolio, with the rest in index funds. While he hasn’t disclosed his total holdings since leaving in 2014, his 4% stake at the time would be worth about $120 billion today.
“I’m happy as an investor, and I’m loyal. It’s my baby,” Ballmer said. “Do I have exactly the same number of shares that I did the day I left? No, because we started our philanthropy; I bought the Clippers. On the other hand, do I have a lot of Microsoft shares? Am I the largest investor? Yes to both of those things.”
Steve and Connie Ballmer run the Ballmer Group philanthropy. (Ballmer Group Photo)
To what extent does his continued investment in Microsoft come from his belief in the business, vs. his natural tendency to be loyal?
“On this one, there’s a bit of both,” he said. “I mean, if I thought Microsoft was literally headed for a crash landing, I don’t know what I’d do. But I don’t. I think they’re in a good position.”
Ballmer follows Warren Buffett’s philosophy of investing for the long haul. Maybe he could get 1% or 2% better return by moving his investments around, but that’s more trouble than it’s worth.
“Why would I screw around and worry about all that?” he said.
And so far, at least, the approach has more than paid off. Microsoft stock has risen ten-fold over the past 11 years, from about $38 per share in February 2014 to more than $380 per share as of this week.
The growth in the stock has been “pretty damn good — very damn good,” Ballmer said. “So the company has certainly performed.”
“The stock price, to me, is less important than the innovative health and the profit growth,” he said. “You’re always asking, what happens next? We keep a pretty keen eye on what they’re doing.”
Through that lens, he offered his take on one of Microsoft’s most consequential decisions of the post-Ballmer era: The company’s investment of more than $13 billion in OpenAI, and its complicated relationship with the ChatGPT maker.
“What Satya did with OpenAI, I think was brilliant — and I think it’s fraught with peril, but I know they know that,” Ballmer said. “It’s sort of a juggling act.”
Bill Gates, Satya Nadella and Steve Ballmer in February 2014, when Nadella became the third CEO in Microsoft’s history, succeeding Ballmer in the role. (Microsoft Photo)
As someone who has been in the Microsoft CEO’s seat himself, Ballmer understands the inherent trade-offs in these situations. There’s a pragmatism in Microsoft partnering with an outside company in such a high-stakes area, considering how much the company itself invested in its own AI research, going back multiple decades.
“Since AI is the thing that will, in many ways, drive the future, I can say I’m super impressed he did the partnership,” Ballmer said. “That was good. He’s going to have to manage it well. So far, he’s done that.”
Microsoft’s AI initiatives also build on investments made under Ballmer’s leadership in areas such as cloud and search.
“Thank God Microsoft is in the search business, because you can’t make the AI stuff work without the search technology,” Ballmer said. “Think how much less-useful AI would be if it didn’t have a current corpus of the internet, which you only get through search. So that investment has paid off.”
Ballmer said he believes Microsoft is in a strong position in the cloud and AI, with the leadership team and the deep pockets to take the company to the next level.
How does OpenAI compare to Microsoft’s past partnerships? The closest comparison, Ballmer said, was the company’s alliance with IBM, developing operating systems for early personal computers.
“That’s a place where there was really shared innovation,” he said.
The IBM partnership didn’t end well, I pointed out, alluding to the bitter split over OS/2, which saw Microsoft pivot to Windows in the late 1980s while IBM struggled to gain traction in the PC market.
“It actually ended well — for Microsoft,” Ballmer said.
Still, it might be tempting to see the outcome for IBM back then as a preview for Microsoft now, as the tech giant of today. But there’s a major difference between the PC revolution and the AI era.
“Big behemoths have a special place in this world, because you need all of that capex to run these businesses,” Ballmer said. “So it’s not like you can avoid big companies. You must embrace big companies.”
That puts OpenAI CEO Sam Altman in a much different position than Microsoft was when the company broke things off with IBM.
“Sam knows that,” Ballmer said. “He can’t do what he wants to do without Microsoft, or Oracle, or somebody who’s cash-rich.”
But the IBM partnership is just one of Ballmer’s lasting memories from his nearly 34 years at Microsoft.
Key milestones and memories
Many of his recollections revolve around the people he worked with. For example, he remembers going campus-to-campus with Allen in the early days, interviewing and hiring new graduates and setting the framework for a college recruiting program that became “the lifeblood” of Microsoft’s growth, especially on the engineering side.
Many of Microsoft’s current leaders, such Scott Guthrie, executive vice president of Cloud + AI, and Rajesh Jha, executive vice president of Experiences + Devices, were hired directly out of school.
Other highlights included interviewing and hiring Brad Smith, now Microsoft’s president and vice chair, and Amy Hood, now CFO. He remembers his first trip with Nadella, a customer visit with Walmart. That’s when he began to realize, “This guy has a lot of potential.”
Steve Ballmer with former Microsoft Windows NT leader David Cutler, right, at a 2018 Clippers game. (GeekWire Photo / Kevin Lisota)
Ballmer has strong memories of working with David Cutler on Windows NT and Azure; with Jean-Philippe Courtois on Microsoft’s international business; and with Steven Sinofsky to get Windows back on track after delays and technical problems with Longhorn/Vista.
The list goes on and on — a who’s who of Microsoft’s leadership history, including many executives who have since left or retired.
But he especially loved going into the field to connect with the company’s salesforce. “You didn’t see ’em everyday,” Ballmer said, with his signature enthusiasm. “So it was always a BIG THING when you went, and you’d talk about the business, and you’d be intense.”
In his nearly 34 years at Microsoft, Ballmer’s roles evolved alongside the company’s rapid growth. He joined in 1980 as its first business manager, bringing structure to an ambitious but scrappy startup.
He later took charge of sales and marketing, spearheaded Microsoft’s enterprise expansion, and helped to solidify the company’s dominance in personal computing. As CEO from 2000 to 2014, he led the company through the dot-com crash, the resolution of antitrust battles in the U.S. and Europe, and the rise of cloud computing — with both successes and missteps in areas like search and mobile.
“I have strong memories of looking at where we could really get in the phone business much before we actually did,” Ballmer said. “I think it was three or four years earlier. I made a bunch of trips to Taiwan. We were looking, at that time, at maybe acquiring HTC, because it was already clear we would have to do hardware.”
Mobile, M&A, and tech rivalries
Years later, Microsoft ended up acquiring Nokia’s smartphone business, a story with enough twists and turns to fill a novel. Nadella ultimately pulled the plug on the business after taking over as CEO.
Ballmer said Microsoft’s problems in mobile went back to its original approach to the category.
“I’ll take blame for this: We wanted to maintain too much similarity to Windows, and so we had a goofy UI,” he said. “But it also relates a lot to the business model, and not having that well thought-through, and being wed to the past.”
Then-Microsoft CEO Steve Ballmer opens the company’s Bellevue Square store in November 2011. (Microsoft Photo)
We talked extensively about Microsoft’s history of mergers and acquisitions — a topic worthy of its own installment in this series. Discussing the 2011 acquisition of Skype, which Microsoft has since announced it will shut down, Ballmer called it a smart deal that was poorly executed, saying the company spread itself too thin by simultaneously investing in its Lync enterprise calling platform.
“It was really only mine for a short period of time. Instead of really doing the right thing with Lync and Skype, they let them go their own direction,” he said. “Neither one got any strength.”
Throughout his career, Microsoft faced a wide range of competitors, from operating system rivals to cloud challengers. In his early years as CEO, Linux and OpenOffice were seen as existential threats to Microsoft’s dominance in operating systems and productivity software.
The company successfully fended off these challenges on the desktop. I asked Ballmer, in hindsight, if the open-source threat wasn’t as serious as it seemed at the time. He vehemently disagreed.
“We fought over every deal. We marketed the hell out of Office. We came in with strategies to really make it desirable for companies to adopt it broadly. We worked intensely with OEMs on the advantages of Windows versus Linux,” he said.
“Dude, people act like we were asleep in the early part of the 2000s and we were resting,” he said. “No, we had real competition.”
Microsoft also worked hard in the enterprise market to ensure that Windows Server remained a viable alternative to Linux, helping to set the stage for the company’s subsequent expansion to the cloud.
Along with Apple in computing and Sony in game consoles, Google emerged as one of the Redmond company’s biggest adversaries — expanding beyond its search business to challenge Microsoft with its Chrome browser, Chrome OS, Chromebooks, and Google Docs.
Google’s ability to leverage the cloud as a delivery model made them “tougher to just defeat” as a competitor, Ballmer said.
Gates, Ballmer, and Microsoft’s impact
Over the years, Ballmer’s relationship with Gates also evolved significantly. In the early years, they worked closely together on key projects like the IBM partnership, with Gates leading on product vision while Ballmer focused on business operations and company growth.
Steve Ballmer became Microsoft’s second CEO in January 2000, succeeding Bill Gates, who hired him in 1980 as the company’s first business manager. (Microsoft Photo)
After Ballmer shifted to run Microsoft’s sales operation in the 1990s, they didn’t work together as much. Ballmer became CEO in 2000, with Gates serving as chief software architect and chairman of the board.
Ballmer describes that first year as CEO as especially difficult. Things got better after that, but the structure still made it challenging.
“I’m CEO, so the buck stops with me, so I have to now start questioning and wondering about our technical strategy,” he said. “But I’m not always firm enough about some of the things, and it never worked quite as well in that period, from about 2001 to 2004.”
As Gates began stepping away from his day-to-day role, from 2006-2008, Ballmer assumed responsibility for Microsoft’s product direction. He looks back on the years that followed as some of his best, guiding products like Azure, Office 365, and Windows.
The tension between them over Ballmer’s 2014 departure has been documented over the years by Vanity Fair, Bloomberg and others.
Gates, in a recent interview with GeekWire, said Microsoft wouldn’t exist as it does today without Allen and Ballmer — including the “mind-blowing energy” that Ballmer put into the business.
“Bill is still, to this day, the smartest person I’ve ever met,” Ballmer said. “His ability to collect information, see patterns in his head, and do inference, it’s really unique.” Is he infallible? No. But he’s a “genius, absolutely,” and “a difference-maker in the world.”
As Microsoft approaches its 50th anniversary, Ballmer says the company’s unique contribution to the world has been the democratization of computing, for people and businesses, across the desktop and server, while transforming the IT industry in the process.
“Did Microsoft make that happen? Abso-frickin-lutely. No question,” Ballmer said. “Microsoft changed the world.”
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